The litigation goes back to 2002, when the township supported a redevelopment plan to buy and then raze the modest brick homes in the blighted neighborhood and replace them with new homes, apartments and stores. Residents sued, saying they would not be able to afford to live in the new development.

The case received national attention and was one of the most anticipated on the Supreme Court's docket because it involved the theory of racial disparate impacts. Some residents asserted that the redevelopment was discriminatory because three-fourths of the Mount Holly Gardens residents were minorities.

But Susan Silverstein, an AARP Foundation Litigation Attorney who represented residents, said the case wasn't really about that controversial legal theory, but rather about getting a good outcome for the people who lived in the neighborhood.

Lawyers said they will move within the next few days to dismiss the court case, which was scheduled for a Supreme Court hearing on Dec. 4.

Over the years, residents of moved out. Those who remained _ there are about 60 families, roughly half of them homeowners _ dealt with uncertainty.

Rebeca Gonzalez said her life was on hold as she was afraid to make repairs to a home that might be taken from her.

"Now I have hopes for the future and plans,'' she said Wednesday night after the township council's unanimous vote to settle the case.

All five current members of the council campaigned on promises that they would settle the litigation, saying it was right for Mount Holly Gardens residents and also that it would allow a needed redevelopment effort to move ahead more quickly.

Under the deal, Philadelphia-based TRF Development Partners would pay the township $2.1 million for land on which it is to develop 44 units of housing over the next five years.

Twenty units would be reserved for current residents of Mount Holly Gardens who would sacrifice the equity in their current homes but would not have to pay for the new ones. The other 24 would be sold off at market rates starting around $175,000 _ enough to subsidize the homes for current residents.

TRF has agreed to not take a profit, so any revenue from the house sales after it recoups its costs would go to the township.

The township has agreed to pay about $700,000 for the homes and relocation costs of families who want to leave Mount Holly Gardens. The township would have other costs as part of the arrangement, including most of the construction of the first four units of the new development.

"This is what the plaintiffs have always requested,'' said Olga Pomar, a lawyer for South Jersey Legal Services who represents residents. "They didn't want the community to be redeveloped and not be involved in it.''